Jute trade

The jute trade is centered mainly around India and the Indian State of West Bengal. The major producing country of jute is India,[1] due to its natural fertile soil. Bengal jute was exported to South East Asia from the 17th century by the Dutch, French and later by other Europeans.

By the 1790s a small export had developed to the Scottish city of Dundee, where the flax spinning industry could use a small percentage to lower costs.

Thomas Neigh, a Dundee merchant invented the mechanical process of spinning jute in 1833 by first soaking it in whale oil.[2]

Raw jute was exported from Bengal by British merchants in increasing quantities from the 1840s replacing flax in the Dundee mills – becoming known as "Juteopolis".[3]

Dundee became the global centre of the industry it had created, employing more than half the population in the mills.

The mill owners creatively developed new markets for the jute goods, principally sacks, worldwide.

In 1858 Indian financiers supported the importation of spinning machinery from Dundee in order to create their own industry. The Indian jute barons were able to pay workers less and gradually began to take over. Dundee had better access to European markets and the mills did not completely collapse until the 1960s.

Because the Indian Empire had no tariff barriers with other British countries, Dundee was bound to fail despite superior quality and working standards.[4]

By 1895 jute industries in Bengal overtook the Scottish jute trade. Many Scots worked in Bengal to set up jute factories for Indians, dominated by Marwari brokers like G. D. Birla.

Jute coffee bags are perhaps the most famous product, known as hessian or burlap. They found a military use starting in the Crimean War. In World War One the government awarded the entire contract for sandbags to a Greek-Indian firm in Calcutta.[5]

It has been used in the fishing, construction, art and in the arms industry. India has the bulk of the jute industry (60%), but the raw jute comes mainly from Bangladesh which is the second-largest producer of jute products.

Nearly 75% of jute goods are used as packaging materials, burlap, gunny cloth, (hessian), and sacks. Obsolete machinery, trade union troubles and a lack of innovation have seen the Indian industry stagnate for the past 70 years.[6]

Carpet backing cloth, the third major jute outlet, is fast growing in importance. Currently, it consists of roughly 15% of the world's jute goods consumption. The remaining products are carpet yarn, cordage, felts, padding, twine, ropes, decorative fabrics, and heavy-duty miscellaneous items for industrial use.

As plastic is banned for consumer bagging, jute bags are now taking a greater share of the market.[7] India produces 60% of global jute products, however, problems of lack of investment, water shortage, poor quality seeds and urbanisation are hampering its regrowth as a replacement for plastic.[8]

History

Jute has been grown in the East Bengal region for centuries. It was produced for domestic consumption in the villages of present-day Bangladesh and West Bengal.

Jute was used for rope production until the modern era, but the creation of the Jute Industry led to the collapse of Indian handloom jute in the 1880s. In the 1850s roughly £250,000 of jute products were exported annually.[2]

Jute was an export material demanded by South East Asia which was fulfilled by Indian and European trading firms.

The modern jute industry was not invented until 1833 in Dundee, but small quantities were used in flax and hemp spinning after 1790.

By the early part of the twentieth century, there were huge increases of finished jute exports and a massive reduction in the export of raw jute.[2] India was gaining around £35 million per annum from processed goods, with only £8m earned by sales of raw jute to Brazil, New York, Japan, Germany and the United Kingdom.

Partition meant that 75% of the Jute growing areas were in Pakistan, but all 106 mills, the baling centres and export hubs were in India. Jute was the subject of the first inter-Dominion agreement, however, the devaluation of the Indian rupee and Pakistani demands for a share of the export tariff led to break downs.[9]

250,000 workers were directly employed in the industry, supporting 4 million peasants and providing 20% of India's foreign earnings.[10] Despite this, a long depression ensued due to the politics involved and the oligopolistic practice of the Indian Jute Mills Association.[11]

The long depression in Jute is partly attributed to the exploitation by the Indian Jute barons who only pursued short term profit after purchasing the British invented and developed mills. Jute mills continue to close, 8 in the last few years, down to 55. Migrant workers have left the state, wages have not increased and strikes have been commonplace.[12]

Jute traders

East India Company

The British East India Company was the British Empire Authority delegated in Bengal from the 17th century until dissolved in 1857. The Dutch and the French were the first jute traders.

The company began exporting gunny sacks to South East Asiam during the seventeenth and eighteenth century.[13]

In the 1830s Thomas Neigh imported jute to Dundee and experimented using flax spinning machines to make cloth. This was not initially successful, but used as a small mixture with flax until they discovered that whale oil made it soft enough to be spun.

Demand for jute skyrocketed as its uses in sacks, ropes, and cloth displaced flax.

Between 1833 and 1855, Bengal saw a boom in growing jute, but a decline in its cottage hand spinning.

In 1855 George Acland was financed by Bysamber Sen to import Dundee fabric spinning machinery (and whale oil) to start the first factory in India at Serampore.[14]

Although a failure, he inspired the Borneo Company to start a steam-powered weaving and spinning mill in 1857, whereon a dozen companies began producing for domestic Indian use and export to the east.

By 1908 Calcutta was the world's largest jute producer, having defeated Dundee. From the 1890s the Marwaris had entered the market as brokers (like the Birla group) and became the dominant owners of an industry employing over 300,000 workers.

Bangladeshi jute traders

Being a major player in the long history of jute trade and having finest natural fibre, Bangladesh has always had an advantage in raw jute trading. Bangladesh is still the largest producer and exporter of raw jute in the world. After the separation of Bangladesh (East Pakistan) from Pakistan in 1971, the jute trading was not limited to specific groups like India or Pakistan. After the independence of Bangladesh, most privately owned jute mills were nationalised under the socialist policies of the Awami League government.

Later, to control these jute mils in Bangladesh, the government built up Bangladesh Jute Mills Corporation (BJMC). No other jute mills were allowed to grow in the private sector before 1975. After Ziaur Rahman became Bangladesh president a new age dawned upon the Bangladesh jute industry. This incident grew many raw jute traders from different corners of Bangladesh who used to supply raw jute to BJMC owned jute mills. This group of traders are called Beparis, who buy raw jute directly from the farmers.

Bangladesh Jute Mills Corporation (BJMC), a public corporation in Bangladesh, is the largest state owned manufacturing and exporting organisation in the world in the jute sector.[15][16]

BJMC owns and operates a number of jute mills around Bangladesh:[15]

  • Dhaka Zone: Bengal Jute Industries Limited, Pride Jute Mills Ltd (established: 2003), Golden Jute Industries Ltd (established: 2012) Bangladesh Jute Mills, Karim Jute Mills, Latif Bawany Jute Mills, U.M.C Jute Mills, Janata Jute Mills, Qaumi Jute Mills, Rajshahi Jute Mills. Mony Jute Goods Handicrafts and textiles.
  • Khulna Zone: Afil Jute Mills Ltd, Aleem Jute Mills, Carpeting Jute Mills, Crescent Jute Mills, Eastern Jute Mills, Jessore Jute Industries, Peoples Jute Mills, Platinum Jubilee Jute Mills, Star Jute Mills
  • Chittagong Zone: Amin Jute Mills, Amin Old Field, Gul Ahmed Jute Mills, Hafiz Jute Mills, Karnafuli Jute Mills, Development of Decorative Fabric, M.M. Jute Mills, R.R. Jute Mills, Bagdad-Dhaka Carpet Factory, Furat Karnafuli Carpet Factory

BJMC also operates mills that do not deal in jute, including Galfra Habib Ltd., Mills Furnishing Ltd. and Jute-Fibre Glass Industry.[15]

Jute cultivation and jute trade in Bangladesh are sectors where significant incidence of child labour has been observed and recorded in the 2014 TVPRA List issued by the Bureau of International Labor Affairs.[17]

Dundee Jute

The entrepreneurs of the Dundee jute industry in Scotland were called the Jute Barons.[18]

Dundee was a centre of flax spinning and the whale oil industry. They realised that jute could be mechanically spun if whale oil was added.

They created a huge new industry making bags for the transport of goods like coffee and as sandbags.[19]

The Dundee jute industry started to decline when the machinery manufacturers sold the machinery to Indian merchants who benefitted from easier access to raw materials and lower pay.[20]

This is a famous example of free trade in which the liberal government was elected to not enact trade barriers allowing the Calcutta industry to win.

Given that the "Dundee Jute Barons" had ownership stakes in Calcutta and Dundee, the decline in Scotland was not so burdensome on them. Over 50% of the workers in Dundee were in Jute and two-thirds were women, much of the remainder were children because they could be paid less.

The boom had led to slums, over crowding, poor working conditions and low pay.[21]

Post Independence India.

The Indian Jute Mills Association is the apex body controlling the Indian trade.[22]

Birla is the most famous business giant in India which began as a Jute broker.

The Birla family is Marwari along with Mittal and Bajaj. Indian Jute is considered to be dominated by Marwari.

The industry has faced considerable trouble, for example, a mill owner was murdered by his workers in 2015 when he proposed cutting down hours. 6 such murders have occurred in recent years.[23]

The Jute Industry in India depends on government purchase. Since the millennium government procurement for mandatory packaging in jute has decreased and is only now being reversed - at the consumer level – by the plastic ban.[24]

Pakistani Jute Traders Pre-1971

After liberation from the British, East Bengal with possessing the finest jute fibre stock, lacked an effective industrialised jute manufacturing. Several groups of Pakistani families (mainly from West Pakistan) came into the jute industrialisation business by setting up several jute mills in Chittagong, Khulna, Dhaka and Narayanganj.

Among these families, the most significant ones are:

  • The Bawanis
  • The Adamjees
  • The Ispahanis
  • The Maniyas
  • The Khans

See also

References
  1. "Statistics — World production of Jute Fibres from 2004/2005 to 2010/2011". International Jute Study Group (IJSG). 19 November 2013. Retrieved 9 January 2014.
  2. Chaudhury, N.C. Jute and Substitutes 2000, Biotech Books
  3. Miskell, Louise & Whatley, C.A. "‘Juteopolis’ in the Making: Linen and the Industrial Transformation of Dundee, c.1820–1850" Textile History 1999
  4. "How Dundee lost the battle for jute" Evening Telegraph 12 November 2014. Retrieved 15 May 2020
  5. "Ralli Brothers: The history remains as a reminder of entrepreneurial abilities of economically shattered Greeks" The Economic Times 2 August 2015. Accessed 15 May 2020
  6. "Problems of India’s Jute Industry" gktoday.in 25 October 2015. Retrieved 15 May 2020.
  7. "NDMC opens three outlets to sell jute bags" The Hindu 3 October 2019, Retrieved 15 May 2020
  8. "Is jute the right replacement for single-use plastic?" 3 October 2019 Business Today Retrieved 15 May 2020
  9. Sengupta, Anwepta."Unthreading Partition The Politics of Jute Sharing between Two Bengals" Economic and Political Weekly 27 January 2018. Retrieved 15 May 2020
  10. Jai, Anil. "Trends in the Jute Industry since Independence" Social Scientist Vol. 6, No. 6/7, Special Number of West Bengal (Jan. - Feb. 1978), pp. 83–102. Retrieved 15 May 2020
  11. History Indian Jute Mills Association – ijma.org
  12. "Jute Industry in West Bengal Faces Crisis" Low Wages, Exploitation Leave Mill Workers Facing Uncertain Future"
  13. Deb, Pijush Kanti (1954). A comprehensive study of Jute. K.M. Deb. OCLC 41690549.
  14. Wallace, D.R. (1928). The Romance of Jute. Calcutta: Empire Press Calcutta. p. 7.
  15. BJMC official website
  16. "BJMC on the Jute Ministry website". Archived from the original on 8 June 2004. Retrieved 28 November 2007.
  17. List of Goods Produced by Child Labor or Forced Labor
  18. "Dundee, jute and empire: View as single page". www.open.edu. Retrieved 12 October 2019.
  19. "3.1 Why jute? Why Dundee?" OpenLearn
  20. "The history of mills in Dundee" BBC website. 2 December 2009, Retrieved 15 May 2020
  21. "FDCA - Jute Industry". www.fdca.org.uk. Retrieved 12 October 2019.
  22. "List of Member Mills of IJMA, Jute Mills in India". www.ijma.org. Retrieved 12 October 2019.
  23. "Jute mill owner's death exposes the industry's crisis in West Bengal". The News Minute. 25 February 2015. Retrieved 12 October 2019.
  24. Reporter, S. I. (19 September 2019). "Paper, jute product stocks extend rally amid single-use plastic ban buzz". Business Standard India. Retrieved 12 October 2019.
  • Pat Sharajantra (Jute Conspiracy – in Bangla), Fazlul Bari, Forum of Environmental Journalists of Bangladesh (FEJB), Dhaka, 2000, ISBN 984-756-005-6
  • Evaluation of Jute Policies and a Jute Policy Model for Bangladesh

Sultan Hafeez Rahman, 1984, Bangladesh Institute of Development Studies (BIDS), Dhaka, Bangladesh.

  • Report on the Marketing and Transportation of Jute

Indian Central Committee, Calcutta, India, 1940.

  • Export Demand Elasticities of Pakistan's Jute Trade

K H Imam, Bulletin of the Oxford University, Institute of Economics and Statistics, Vol. 32 No.1 (Feb. 1970)

  • Experiments in Econometric Analysis of an Import Demand Function

Pakistan Economic Journal, Vol.11 No.4 (Sept. 1961)

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